Can A Section 8 Company Convert Into Another Business Structure?

Converting a Section 8 Company in India: Adapting Legal Structure for Evolving Objectives

1. Conversion into a Private Limited Company or Public Limited Company: A Section 8 Company in India can transform into a private limited or public limited company by passing a special resolution and securing approval from the National Company Law Tribunal (NCLT), allowing it to pursue profit-generating activities while preserving the advantages of limited liability.

2. Conversion into a Section 8 Company Limited by Shares: To preserve its non-profit status while raising funds through share issuance, a Section 8 Company can convert into a Section 8 Company limited by shares by amending its Memorandum and Articles of Association to include share capital and securing approval from the National Company Law Tribunal (NCLT).

3. Merger or Amalgamation: A Section 8 Company has the option to merge or amalgamate with another entity, be it for-profit or another Section 8 Company, involving steps such as creating a merger scheme, gaining member and creditor approval, and obtaining NCLT (National Company Law Tribunal) consent, potentially resulting in a different business structure for the combined entity.

4. Dissolution: In certain instances, a Section 8 Company may opt for voluntary dissolution, where its assets and properties must be transferred to another Section 8 Company or a registered charitable organization sharing similar objectives.